Schrödinger’s Bond

I’m never going to get tired of looking at this photo…

Did Chávez have his “you didn’t build that” moment after the Amuay disaster when he said that, accident or no accident, “as some philosopher whose name I don’t remember said, The Show Must Go On“?

Both were gaffes, and the attacks each spawned are arguably unfair. But both seem to transcend questions of context by getting straight at the nub of what opponents find so irksome about each leader. For Chávez, what matters really is the show – the nuts and bolts of governing seem to bore him.

Chávez’s show-must-go-on gaffe was especially unfortunate coming days after the “Baptism of Crude” he gave his new “Petrorinocos” – which are pitched as bonds the state will use to catch-up on some of its humongous labor liabilities going back more than 20 years.

Unpaid labour liabilities (backpay and old-to-ancient but still outstanding severance benefits) amount, by some estimates, to a whopping $19 billion, and are a constant irritant in the state’s relationship with its workers, former workers and retirees. Not surprisingly, various schemes to deal with the debt surface around election time like so many mushrooms after a soaking spring rain, since you obviously need to motivate those folks to turn up and vote for you.

The Petrorinoco Bonds are the latest of these schemes: bonds that workers can either sell on right away for cash or keep as a savings vehicle.

Trouble is they exist in a weird state of suspended unreality, finely balanced between potentiality and existence. With no actual prospectus published, the closest thing we have to detail about them at this point comes from – I shit you not – extreme close-ups  of the mock-up Chávez held-up to be smeared with oil at the launch event:

Here are some of the things we still don’t know about Petrorinocos:

  • Which entity will issue them? Will it be the Republic? PDVSA? BCV? Fonden? Bandes? Someone else?
  • How many will be issued?
  • In what sequence?
  • To whom?
  • What will be the value of the coupon?
  • Will they have coupons?
  • When will they mature?

Basically, we don’t know anything about Petrorinocos at all, because Petrorinocos don’t actually exist at this point.

The thing Chávez held up to smear with oil wasn’t even a Petrorinoco, but an artist’s flight of imagination about what a Petrorinoco might one day look like.

What Chávez did in his little P.R. Stunt amounted to smashing a bottle of champagne onto the blueprints for a ship you haven’t built yet, and calling the ship “christened”.

The show must go on…

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